A warrant that is issued by a company on an unrelated underlying security such as that of another company or on the collective performance of an equity basket or index. For example, a bank may issue calls and puts on the S&P500 index to public investors. Warrants are issued in a series of strikes and maturities and traded in a fashion similar to a listed exchange series of contracts. Issuers can also react to market demand by continuing to bring new issues with longer maturities and updated strike prices.

This warrant is also referred to as a covered warrant.